Imagine yourself in Steve’s shoes: He’s enthusiastic about innovation and has the CEOs’ support to run a innovation workshop. Steve, however, was less enthusiastic about actually leading the process. While Steve has deep technical expertise in his department, he wasn’t confident about generating new ideas relevant to the whole organisation. But now, after a bit of research and some mentoring from an innovation facilitator, Steve is confident he can guide the team to generate ‘creative’ ideas using a simple tool — PESTLE — and all he needs are some newspapers and scissors!
What is PESTLE?
PESTLE is a menmonic for contextual factors that could affect your industry, products, strategy, marketing, or be triggers or drivers for new innovations.
It encourages you to consider these factors in relation to your focus: your organisation as a whole, or a particular product or service. By doing so you’re thinking outside the square – and that’s where you’ll find innovation:
P – Political
E – Economic
S – Social
T – Technological
L – Legal
E – Environmental
What is it for?
PESTLE is very useful for identifying future opportunities and challenges, and generating ideas to address them, as per Phase 1 and 2 in the innovation growth spiral. In Steve’s case he’s in an existing organisation who may be seeking to refresh a product or redirect its focus. For others, this tool could be the basis for them identifying an opportunity for an entirely new venture. There’s no reason that PESTLE can’t be used again, especially at stages 5 through 7 where your innovation or venture is more significant and so more likely to be effecting and effected by trends or changes in your industry and community.
How do you use it?
Here’s where you use the newspaper and scissors! Get as many newspapers and other media sources you can get your hands on. These can be paper or digital e.g. a keyword search on the top 10 environmental factors affecting the food and beverage industry.
Guided by questions below, cut out, create sticky notes or save articles under each of the P-E-S-T-L-E headings.
Use these questions to prompt the scanning and filtering of news and other publications. Go wide – don’t limit your search to your industry segment or geographic location. Err on inclusion — even if you aren’t sure immediately what that effect may be, if it’s a big trend (e.g. robotic automation) then include it.
- What is the political situation and how can it affect our community/industry/nation?
- What are the prevalent economic factors and trends that may affect us?
- What social and cultural changes are occurring, what’s driving them and what may be their impact?
- What technological innovations are, or could, affect our industry, products or marketing?
- Are there any current or foreshadowed legislative or regulatory changes?
- Will changing environmental conditions or concerns affect our industry?
Note these trends or ideas on sticky notes, prioritise the ideas as a team then go implement.
You can download a more detailed step-by-step guide to facilitating a session below.
What’s an example?
Over the years we’ve seen how environmental scanning helps trigger new ventures that make the most of new technology in legacy industries, and drives other organisations (like Steve’s) to make hard decisions and invest in innovation early to their advantage, ahead of predicted legislative changes.
We’ve also seen innovators ignore the PESTLE factors to their detriment e.g. failing to see their solution was going to be superceded by new technology, or over-stated revenue potential by using out-dated economic predictions.
Our own model and services have been formed in response to PESTLE factors:
- P – Changes in social change funding e.g. social enterprise more than traditional charities,
- E – Economic cycles e.g. avoiding dependency on resources boom profits,
- S – Umet needs in the local market e.g. support programs for early-stage ventures,
- T – Ability to work and collaborate remotely e.g. growth in cloud-based software,
Why PESTLE and this method works
Insights and innovations are rarely generated in isolation. More often they come from when diverse ideas, people and trends intersect and interact. Rather than feel you or your team have to be naturally ‘creative’, you can follow a step-wise process and focus your attention on making connections – identifying patterns and connections is already a natural human habit and skill. PESTLE also draws your attention up and outwards: away from your emails, product development or marketing and towards big trends, ideas opportunities:
- Drivers of human behaviour, like towards convenience, meaning or identity,
- Triggers or shifts your industry’s assumptions, like the barriers to new entrants,
- Enablers, like software that opens new markets or streamlines your operations.
Be careful of…
Two bits of advice note about potential obstacles to using PESTLE effectively.
1.) You need to be open – favour creative possibilities, new ideas and connections over critical analysis. Analysis and investigation can happen in the next phase.
2.) Be sure to gather a diverse but relevant set of materials to draw from: newspapers, industry magazines, also publications or sources that relate directly to the questions e.g. environmental magazines, or searching for “top ten environmental trends this decade”. Don’t just review the local community newspaper expecting to see global trends relevant to your industry!
If you take the above into consideration you, like Steve, will feel more confident facilitating the first steps to developing new ideas for innovations with your team.
If you’ve generated ideas, check out the other tools including on ‘Lean’ methods to rapidly iterate and evolve those ideas and test with potential customers: http://www.midwestinnovation.org.au
If you want to join an open workshop or have a training session in-house, check out the program guide https://pollinators.org.au/learning/program-guide/
For other support services relevant to your sector or venture, you can check out the map of other support services and ventures https://pollinators.org.au/innovation-map/
Download the guide
Click on the image to download the PDF guide to facilitating a team innovation session using PESTLE